ANIL KUMAR Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioner has challenged communication dated October 8, 2013 issued by the Deputy Secretary (Tax), Government of Gujarat, under which, the petitioner's application for remission of tax and further liabilities under section 41 of the Gujarat Value Added Tax Act, 2003 ("the V.A.T. Act", for short) came to be rejected. Brief facts are that the petitioner was based in Rajasthan and was engaged in industrial and commercial construction activities. He applied for and was awarded a tender issued by the Western Railway, Ahmedabad, for construction of minor bridge. For execution of such work, the petitioner started purchasing goods from the registered dealers in the State of Gujarat. As per his own say, with awarding of this contract, his business in Gujarat gradually increased and he shifted his base from Rajasthan to Gujarat in April 2008. All along, however, the petitioner never applied for and was therefore obviously not granted any registration under the V.A.T. Act. Admittedly, if the petitioner wanted to take the credit of the V.A.T. paid goods from the sellers, such registration was required. As a consequence of the petitioner's failure to obtain the registration, he was unable to get the credit. To assess the petitioner's liability for V.A.T., proceedings were initiated and we are informed that the Assistant Commissioner confirmed total tax demand of Rs. 41,81,169 and permitted deduction of Rs. 6,68,242, which was the tax deducted by the Western Railway at source. The Assistant Commissioner imposed penalty equal to the amount of tax and also demanded interest of Rs. 15,29,085. The order of the Assistant Commissioner is under challenge before the Gujarat Value Added Tax Tribunal. At that stage, the petitioner applied to the State Government under application dated February 4, 2010 and requested for remission of the tax and penalty under section 41(1) of the Act.

(2.) On this application, the State Government passed impugned order dated October 8, 2013. In such order, it was conveyed to the petitioner that under the V.A.T. Act, any dealer who is liable to pay tax is required to obtain registration. The petitioner had not obtained registration for the period for which he had asked for remission, his application therefore is rejected.

(3.) The learned counsel for the petitioner assailed the said order contending that there is no requirement under section 41(1) of the V.A.T. Act that a dealer must be registered before his request for remission can be accepted. He submitted that the petitioner had made detailed grounds why remission should be granted. The State rejected such application without hearing the petitioner. He relied on a decision of the Supreme Court in case of Sahara India (Firm) v. Commissioner of Income-tax, Central-I, 2008 300 ITR 403 to contend that even though section 41(1) of the V.A.T. Act does not specifically provide for hearing, the same must be read into it.